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What Africa Stands to Gain from the Internet Economy

e-Conomy Africa 2020, a new report released on November 11, 2020, by Google and the International Finance Corporation (IFC), estimates that Africa’s Internet economy has the potential to reach 5.2 percent of the continent’s gross domestic product (GDP) by 2025, contributing nearly $180 billion to its economy. This will depend greatly on the usage level of digital technologies by businesses and the right mix of policy actions. The projected potential contribution could reach $712 billion by 2050.A combination of increased access to faster and better quality Internet connectivity, a rapidly expanding urban population, a growing tech talent pool, a vibrant startup ecosystem, and Africa’s commitment to creating the world’s largest single market under the African Continental Free Trade Area are some of the key factors driving this growth. Currently, Africa is home to 700,000 developers and venture capital funding for startups has increased year-on-year for the past five years, with a record $2.02 billion in equity funding raised in 2019, according to Partech Ventures Africa. Nineteen of the top 20 fastest-growing countries in the world are in Africa. Urbanization is on the rise, and an increasingly young and educated population is driving higher consumption of online services. Digital startups in Africa are driving innovation in fast-growing sectors, including fintech, healthtech, media and entertainment, e-commerce, e-mobility, and e-logistics, contributing to Africa’s growing Internet gross domestic product (iGDP) — defined as the Internet’s contribution to the GDP.